Something amazing, surprising, and somewhat unprecedented is happening in the music industry... something that hasn’t happened in over a decade...

Financial analysts are turning bullish on the music industry again.

Just this week, Goldman Sachs analyst Lisa Yang issued a report projecting recorded music revenues will more than double to $41 billion by 2030. That’s a dramatic increase over the $15.7 billion the IFPI reported in global recorded music revenues last year, and a return to 1998 pre-Napster levels.

Driving this growth is streaming, which Yang estimates will drive $34 billion of total industry revenue by 2030, $28 billion of which comes from paid subscriptions, and ad-supported contributing the other $6 billion.

She further predicts that $4 billon of the 2030 totals will come from performance rights, with synchronization rights contributing $500 million, and physical/downloads sales $700 million (notably less than the “other” catch-all category of $1.2 billion).

But the real story here is streaming, clearly. How fast is streaming growing? This same analyst in December predicted global streaming revenues would reach $14.1 billion by 2030. That means it’s growing so fast that just 7 months later she DOUBLES the forecast!

“Subscription streaming creates new revenue pools which are more profitable and stable for rightsholders,” Yang said in a podcast this summer. “Streaming creates a lot more sustainable, profitable revenue stream that should drive doubling of the market over the next 15 years.”

Sparking her update was the huge uptick in streaming subscribers and activity in 2016, figures Yang didn’t yet have for her original Dec. 8 forecast. Paid subscriptions to music services grew to 112 million globally at the end of last year. This drove a 60% growth in streaming revenues (paid and ad-supported) to $3.9 billion, and is largely credited for the 6% overall growth in global music revenues.

“This is only the beginning,” Yang said the podcast. “There’s tremendous opportunity for that to grow.”

She increased her paid subscriber forecast from 652 million paid subscribers to 847 million by 2030. That more than 6.5 times today’s paid subscription base.

SmartphonesThe 112 million paying subscribers at the end of 2016 represent only 3% of the global smartphone population, Yang said. And every smartphone is a potential streaming node. She expects that by 2030, more than 14% of smartphone owners will pay for a music subscription (revised upwards from her December 9% forecast).

AdvertisingAd-funded music tiers today don’t pay much, around a $2 CPM. In 15 years, she expects CPMs will increase to $8 or more, driving $6 billion in total worldwide. (That’s roughly half what the total global music business was valued for at its floor).

Car and HomeSmart speakers, like Amazon’s Echo, and Internet-connected cars alone could add $8 billion to the music biz by 2030, according to Goldman Sachs. The Echo speaker line alone is expected to ship 10 million units in 2017, and similar devices from Google and Apple are entering the market as well.

Global ReachStreaming will grow in the developing world, China, and India, which are all building mobile-first infrastructure. China for instance (pop. 1.4 billion) has fewer paid subscribers than Sweden (pop. 10 million).

But there are risks.

For starters, there’s still a large population of music fans across generations who simply don’t want to pay. Between usage of low-royalty services like YouTube, to just outright piracy, paid streaming has a long road to go before can achieve critical mass.

There’s also the music industry’s tendency to shoot itself in the foot. Labels and streaming platforms have a contentious relationship at times that affects licensing negotiations. Labels ask for things like windowed releases and, of course, more money, which the platforms resist. And if the platforms try to play the role of label by signing artists to exclusive deals, it may raise the vengeful ire of the labels.

What’s more, labels tend to prefer to work with a few, larger players capable of moving the ball forward in the short term, than nurturing startup innovators that could have greater long-term potential. The kind of one-platform monopoly that iTunes had in the download era can’t be repeated if streaming is to achieve this kind of scale.

But even taking these factors into account, it’s clear that, as Goldman Sachs says, the music industry is approaching a new era of growth. A “second revolution” that, unlike the first, should bolster the industry to new heights rather than tear it down.

“It’s finally turning the corner,” says Yan. “After 15 years of destruction, the next 15 years are all about value creation.”

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